There are steps that can be taken to ensure that company Chief Financial Officers (CFO’s), who already have heavy workloads, can be assured of a fully compliant payroll without having to immerse themselves in the daily details.
As the stewards of financial health, this will enable them to fulfil their role to mitigate risk, manage compliance, deliver assurance to the Board and ensure that payroll is operating in a robust, automated and highly controlled environment. “To create a payroll environment that doesn’t need constant oversight and review, the CFO should implement an annual external audit of the full payroll process and controls,” says Lavine Haripersad, a director at the South African Payroll Association (SAPA). “In addition, the payroll department requires a structure that supports this control framework. These two working in tandem deliver a robust and highly controlled environment within which payroll thrives.” Alongside the annual external audit, the CFO should implement regular compliance audits. These will help keep the system fully compliant and minimise the risk of exposure. This can be further enhanced by a regular review of payroll codes to ensure they are compliant from an income tax perspective. A wall of protection “The recruitment process also supports the CFO in building a reliable payroll department,” adds Haripersad. “Talent management and recruitment can ensure that the right level of employee is hired - the role of Payroll Manager should be filled by someone who is multi-skilled, capable of handling pressure, and with extensive financial systems, analytical and technical expertise. Ethical and well-trained employees are crucial to the effective and sustainable management of the payroll department.” In addition, the CFO should work with the CIO (Chief Information Officer) or IT department to develop a robust IT strategy around data security and payroll system access. This is not only relevant in terms of the Protection of Personal Information Act (POPI) and its compliance requirements, but to ensure that confidential data remains that way. Currently the cyber security landscape is too volatile, and cyber criminals too successful, to not ensure that the highest possible controls are in place. Effective measures “Finally, introduce reporting and accounting controls into the payroll department as these add value to the CFO reporting process and keep them fully informed,” concludes Lavine. “An important indicator to the CFO that these systems are working well is when the payroll control accounts are clean.” To add further controls, the payroll department should implement good housekeeping, especially in complex economic times. Employees regularly leave or enter a company so records must be kept scrupulously up to date. If someone leaves, all company property must be removed and system access blocked immediately. Ticking these boxes at the outset will go a long way towards keeping system access to those who warrant it, and removing the risk of the disgruntled employee. ENDS MEDIA CONTACT: Idéle Prinsloo, 082 573 9219, [email protected], www.atthatpoint.co.za For more information on SAPA please visit: Website: http://www.sapayroll.co.za/ Twitter: @SAPayroll LinkedIn: The South African Payroll Association
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It’s personal tax season again and millions of South Africans are busy filling out their tax returns. To avoid any delays in this widescale process, payroll departments across the nation must work quickly and in strict compliance with the law. Failure to do so could result in heavy penalties for their organisations. Arlene Leggat, a director at the South African Payroll Association (SAPA), says that, to satisfy all statutory obligations, not just tax regulations, payroll practitioners need to be suitably qualified. “Payroll plays a leading role in any organisation’s governance and compliance efforts. To reduce risk, employers must ensure their administrators are competent.” But how can they guarantee that this is the case? Practitioners and good governance Payroll practitioners should be driven by good governance practices and must stay abreast of current legal requirements. For example, the recent Protection of Personal Information (POPI) Act places an additional burden on businesses to carefully manage and protect any personal information they store or process about their workers. Practitioners must be aware of such developments and understand how to remain compliant with them in the course of their duties. According to Leggat, as compliance requirements increase, more companies are realising the importance of a professional designation. “SAPA is the recognised regulatory body for payroll practitioners in South Africa,” she says. “When companies hire outsiders, there’s no guarantee they’ll get someone who is competent in their field, and the risk of falling short in their legal obligations is growing year by year.” To be awarded one of SAPA’s professional designations, applicants must have the relevant qualifications and experience needed to perform their duties at junior, mid or senior levels. But even after becoming a member, they’re required to continually improve their payroll skills and knowledge. CPDs A core component of ensuring SAPA members understand good governance practices and compliance with legislation is the association’s continuous professional development (CPD) programme. Members must accumulate a set number of CPD points every 2 years to retain their SAPA title. This can be achieved by attending SAPA-approved courses, each carrying a predetermined number of points. Code of ethics In addition, members are bound to a code of ethics and any breach could result in their membership being revoked. This gives employers the assurance that their payroll officer strives to conduct themselves in a manner befitting their legal and moral responsibilities. In addition, organisations have in SAPA a channel through which to voice any grievances. Hiring for compliance Leggat advises companies to avoid the dangers of non-compliance and promote good governance by hiring SAPA approved payroll practitioners. “We sometimes read of incidents of payroll fraud or noncompliance, and this is usually the result of employing unregulated administrators. For members of a professional body, there are too many controls in place, so poor conduct puts their careers at risk. Therefore, our designations alone promise a high level of compliance and governance.” Employers and unregistered practitioners are invited to enquire about the benefits of SAPA membership. SAPA will be hosting its annual conference this year titled Portraits of Success as follows:
To register visit http://www.sapayroll.co.za/Events/Conference.aspx ENDS MEDIA CONTACT: Idéle Prinsloo, 082 573 9219, [email protected], www.atthatpoint.co.za For more information on SAPA please visit: Website: http://www.sapayroll.co.za/ Twitter: @SAPayroll LinkedIn: The South African Payroll Association
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